Login
ISCOVER
First home buyers have continued to purchase property with broker support even as they struggle to save for a deposit, the LMI provider has revealed.
Lenders mortgage insurance (LMI) provider Helia has released new research that has found that 76 per cent of prospective first home buyers (FHBs) have saved less than a 20 per cent deposit as house prices continue to rise.
The research – which was conducted by research agency CoreData – surveyed 1,015 home buyers, consisting of 608 prospective home buyers and 407 recent home buyers.
As home buyers struggle to save for a full 20 per cent deposit to purchase their home amid rising house prices, Helia revealed that 58 per cent of home buyers have considered alternative steps to get into the property market.
According to Helia, 48 per cent of prospective buyers have considered using government assistance schemes to purchase their home in 2024, an increase from 30 per cent last year.
While interest in government schemes has surged, Helia found that only a third of recent home buyers used government assistance to purchase their home, which the LMI provider said was likely due to eligibility restrictions.
Support from the Bank of Mum and Dad has also increased as prospective home buyers struggle with the upfront costs of a mortgage, with 45 per cent of prospective home buyers likely to receive financial assistance from their family, up from 34 per cent last year.
The research revealed that 92 per cent of prospective buyers have considered using LMI to purchase their home without a 20 per cent deposit, up from 73 per cent last year. Helia found that 55 per cent of recent buyers have used LMI to purchase their home, an increase from 36 per cent last year.
According to Helia’s report, 84 per cent of respondents said that the first property they purchase would not be their “dream or ideal” property and 35 per cent of respondents have considered giving up on purchasing a home.
Helia’s chief commercial officer (CCO) Greg McAweeney said that LMI enables home buyers to enter the property market without a full deposit and allows them to purchase a larger home and start building equity sooner.
“It’s heartening to see in our research that most prospective buyers are showing resilience in the face of the current market challenges and researching alternate ways to achieve their home ownership dreams,” McAweeney said.
Brokers support more FHBs
As prospective home buyers attempt to navigate a complex housing market, Helia’s report revealed that brokers supported 56 per cent of recent home buyers surveyed, an increase from 54 per cent in 2023.
This sits below the Mortgage and Finance Association of Australia’s (MFAA) estimate of broker market share, which said that 74.1 per cent of all new loans were written by brokers between January and March 2024.
In Helia’s report, 45 per cent of those who used a broker said that the main reason for using them was to access better deals, followed by ease of application (41 per cent), reduced stress (39 per cent), and experience and knowledge (36 per cent).
With 42 per cent of home buyers unaware of alternative options when they have less than a 20 per cent deposit saved, McAweeney highlighted the importance of mortgage brokers.
He said: “As a first point of contact for many aspiring home buyers, mortgage brokers have a unique and vital role to play in supporting, guiding, and educating more people on the pathways to home ownership.
“With an increasingly challenging property market, mortgage brokers can unlock unique ways buyers may not have considered previously.”
[Related: Broker market share hits new record high]
JOIN THE DISCUSSION